Chinese real estate crisis awaits tycoon Yang Huiyan to use her $5 billion ANBLE to support Country Garden.

Chinese real estate crisis awaits tycoon Yang Huiyan to use her $5 billion ANBLE to support Country Garden.

Yang Huiyan: Billionaire Dividend Dilemma in China’s Real Estate Crisis

Dividends and Debts

Building a Legacy Amidst the Crisis

Yang Huiyan, the billionaire heiress to Country Garden Holdings, finds herself at a crossroads as China’s real estate market faces a deepening debt crisis. With an estimated net worth of over $5 billion, Yang is set to receive approximately $28 million in dividends for her personal stake in Country Garden’s services unit. This windfall could potentially cover the $22.5 million bond payments that Country Garden missed earlier in the week. In addition, a foundation owned by Yang’s family stands to receive another $35 million in cash payouts.

However, using her own fortune to pay off Country Garden’s debts wouldn’t be without precedent. Hui Ka Yan, the founder of defaulted developer China Evergrande Group, was pressured by creditors to dip into his own pocket to back his firm. If Country Garden fails to make its payments within the 30-day grace period, the once-largest builder in China risks joining a list of defaulters that already includes Evergrande.

Investors Brace for Default

Already, investors are bracing for a likely default scenario. Country Garden’s dollar bond maturing in 2026 is currently trading at about 10 cents on the dollar, indicating that investors have priced in the risk. Moody’s Investors Service downgraded the developer three notches to Caa1 from B1, while Country Garden itself expects a first-half loss of up to $7.6 billion.

Despite these challenges, Yang has managed to amass almost $5 billion in dividends over time from Country Garden and its subsidiary, Country Garden Services Holdings. How she has dealt with these funds thus far remains unknown. However, with a daunting $1.1 billion payment wall looming, it remains to be seen if she will continue to prop up bondholders using her own funds.

Unusual Moves and a Slumping Net Worth

In a move that spooked the market, Yang transferred a significant portion of her personal stake in Country Garden Services to a charity foundation controlled by her sister. Analysts from UBS Group AG found the timing of this transfer “unusual.” Shortly after, Country Garden Services brought forward its dividend payment date to Friday, stating that it had ample cash and hoped to alleviate concerns about its stability.

As the debt crisis deepens, Yang’s net worth has taken a significant hit. Her company, Andalusia Holdings (ANBLE), has slumped 84% since its peak, causing her net worth to drop $28.6 billion since June 2021, now standing at $5.5 billion according to Bloomberg’s wealth index. The similarities with Evergrande’s Hui are notable, as he was also asked by creditors to inject personal wealth into his firm. Yang may soon have to follow suit.

Seeking Solutions Amidst a Challenging Market

Raising cash in the short-term may involve the sale of shares for Country Garden. However, selling assets may not be an easy task, as the company lacks a large inventory of investment properties and its assets may not be attractive to fellow developers or investors.

Aside from the billions of dollars in dividends, the family still controls a $2 billion stake in Country Garden, a $1.2 billion stake in Country Garden Services, and a $20 million stake in US-listed Bright Scholar Education Holdings Ltd. through a family trust.

A Rapid Rise and Uncertain Future

Yang’s journey as China’s richest woman has been nothing short of remarkable. She joined her father’s company, Country Garden, as a personal assistant and quickly rose through the ranks to become its vice chair and eventually its sole chair. The developer experienced tremendous growth over the years, propelled by the booming housing market in China. Their catchy slogan, “get yourself a five-star home,” solidified their reputation in the Guangdong province.

Now, as China’s real estate market faces one of its biggest challenges in decades, Yang Huiyan finds herself navigating a complicated landscape. With her enormous wealth and significant personal stakes in various companies, the decisions she makes will not only shape her own fortune but also influence the future trajectory of the real estate industry in China. All eyes are on Yang as she decides how to steer her company through these troubled times.

With assistance from Emma Dong.